• Weekly Retail Update: April 17, 2017

  • April 17, 2017
Weekly Retail Update

Smaller Stores Help Retailers Win

The U.S. Department of Commerce estimates that nearly 92% of retail purchases still occur in brick-and-mortar stores. On top of that, the top ranked retailers in the U.S. have stores that amount to less than 10,000 square feet. With online sales increasing from 7.3 percent in 2015 to 8.1 percent in 2016, retailers who focus on smaller spaces and bigger consumer value are winning. These numbers suggest that big box retailers struggle when it comes to maximizing sales year-over-year in their large stores. With the strong hold brick-and-mortar still holds in the U.S., retailers need to find ways to minimize space to maximize sales and customer experiences. According to Cowen & Co. research group, “the brick-and-mortar retail footprint in the U.S. is more than 2x that of the UK and nearly 4x that of Canada.” (Seeking Alpha)

Job Gains Stall in February

After employment gains for retailers in January, retail industry employment decreased by 31,300 jobs in February. According to the National Retail Federation, this decrease offsets the gains that made news the previous month. “Mild weather contributed to retailers scaling back employment in February, reversing the gains the industry made in January,” NRF Chief Economist Jack Kleinhenz said. “However, the surge in consumer and business optimism may have propelled the economy-wide increase in jobs last month and supports our prediction for stronger consumer spending and retail sales for 2017.” (NRF)

Three Stores Had 83% of Consumers Spend with Them

According to “The Checkout Penetration Index” from The NPD Group’s Checkout Tracking, Walmart, McDonald’s, and Target saw sales from more than five out of six U.S. consumers. The index is based on millions of customer receipts ranging from retailers to restaurants and online to brick-and-mortar sales. Chick-fil-A and Dollar Tree also saw penetration gains in 2016, and both have been expanding operations aggressively. “The battle for every consumer dollar is heating up, and we must shift from studying what consumers purchase to how they spend their money,” said Marshal Cohen, chief industry analyst, The NDP Group. “Consumers spending on experiences is overlapping with their purchases of products, making every item and visit so important to competing in today’s rapidly changing marketplace.” (CSA)

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About Holly Pels

Holly Pels is the Content Strategy Manager at RICS. When she isn't planning out the awesome content you see on the RICS site, you can find her playing soccer, baking, or drinking champagne.